Benchmark West Texas Intermediate crude for April delivery gained 83 cents Monday at $105.25 per barrel on the New York Mercantile Exchange. The price almost hit $107 per barrel earlier in electronic trading, the highest since Sept. 26, 2008.
In London, Brent crude added 64 cents at $116.61 per barrel.
The rise in oil is driving gasoline prices to levels that weren’t expected for at least another month. Pump prices have jumped an average of 39 cents per gallon since the Libyan uprising began in mid-February. The national average hit $3.509 per gallon overnight, according to AAA, Wright Express and Oil Price Information Service. The average in Southern California is now $3.89.
Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Moammar Gadhafi after 41 years in power. Officials in the country say the country’s oil fields continue to operate, but experts say that the Libya’s daily shipments of more than 1 million barrels will likely be cut off for some time to come.
The fighting could last for weeks, or months, and international oil companies have pulled their workers to safer locations. With no clear leader in charge of the country, analysts say the world cannot depend on Libya’s exports. Saudi Arabia has increased production to make up for the loss of Libyan crude, which goes mainly to Europe, but that puts a tighter squeeze oil supplies as the global economy recovers and consumption rises.
The Energy Information Administration estimates OPEC can crank up production by another four to five million barrels per day. An extended shut down of Libya’s exports would slice that capacity by about 20 percent.
In other Nymex trading on Monday for April contracts, heating oil picked up a penny at $3.0953 per gallon, while gasoline futures lost a penny at $3.0391 per gallon. Natural gas rose 6 cents to $3.867 per 1,000 cubic feet.
(TM and © Copyright 2010 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)